Health insurer nib has grown its half year profit by nine per cent, as it attracts more policy holders and increases premium revenue.

The company made a net profit of $39.7 million in the six months to December 31, up from $36.3 million in the same period a year earlier.

Revenue from premiums grew 20 per cent to $735.4 million, and its total number of policyholders at December 31 was more than 484,500, up almost five per cent from 12 months earlier.

Managing director Mr Mark Fitzgibbon said the company’s Australian business continued to defy escalating competition and “unhelpful regulatory changes”.

But the company’s underwriting margins were under pressure as claims get more expensive, he said.

“Our recently approved premium increase obviously helps, but the industry as a whole really needs to take stock of how we might better improve system efficiency and bend the curve of claims inflation and premium growth.”

nib said the result also benefited from the inclusion of its New Zealand operations that were acquired in 2012, which contributed only one month of revenues in the previous corresponding period.

The company still expects to post an operating profit guidance in the range of $73 million to $80 million for the full 2013/14 financial year, after its half year operating profit came in at $41.4 million.

Its shares dropped two cents to $2.56.